Alexandre Rocha
São Paulo – Since they started exporting wheat for the first time, at the end of last year, Brazilian producers have already sold over 1 million tonnes of the product on the foreign market. Among the main destinations are Morocco, North Africa, and Northern Europe. Egypt is also included among the first countries ever to buy Brazilian wheat, as ANBA informed in January.
According to information provided yesterday (31) by the Agriculture Ministry, from December to March shipping totalled 1.033 million tonnes of the grain. The initial forecast by producers was to reach this figure only in August.
In the evaluation of the technical and economic advisor of the Union and Organization of Cooperatives of the State of Paraná (Ocepar), Robson Mafioletti, one of the reasons for this stimulation of export was the "low liquidity" on the internal market, due to low prices.
In September last year, agriculturalists from the southern state of Paraná, which is the largest wheat producer in Brazil, decided to stop selling on the domestic market due to what they call the "mill dictatorship". The objective was to provoke an increase in prices paid for the grain.
According to sector technicians, in the harvest plan elaborated at the beginning of 2003 by the government, producers, and the industry, the mills had guaranteed they would purchase the Brazilian product for the same price as the imported product. However, after the harvest, they started paying between 15% and 20% less.
Up to the end of January prices had not risen. "The mills continued importing at higher prices and the market did not warm up," declared Mafioletti.
With this, producers from Paraná and from Rio Grande do Sul, also in the south, decided to start exporting, a fact that had never been seen in Brazilian wheat culture in Brazil. This is due to the fact that the country produces less than it consumes. According to figures supplied by the Agriculture Ministry, Brazilian wheat production is around 5.8 million tonnes per annum, whereas consumption is 10 million tonnes.
In January, as PIS (welfare tax) and Cofins (social security tax) started being charged over the products imported, the domestic market was paralysed, providing greater strength to the foreign market. According to the Ocepar technician, the mills decided to "wait and see" what would happen to import after implementation of the new tax system.
The Agriculture Ministry gave another explanation for the export performance. "It is cheaper for a company from the South to export wheat than to sell it to northeastern Brazil, due to coastwise shipping costs, as it is necessary to use a vessel under the Brazilian flag. Taxes like PIS/Cofins also increase the cost of this operation," stated ministry Supply director José Maria dos Anjos, according to a spokesperson for the organization.
Internal improvement
Export and tax uncertainty, together with a drop in offer, according to Mafioletti, made internal prices rise again. Nowadays, according to him, producers from Paraná earn between US$ 160 and US$ 166 per tonne of the grain, whereas last year this value was between US$ 150 and US$ 156.
"The market is more active, and an increase in the area sowed with wheat is even being discussed," stated the technician. Nowadays, according to him, the wheat cropland in the state of Paraná is around 1,170 hectares. It is estimated that there could be a 5% to 10% increase in this total.
With this improvement of the domestic market, and the increase of the cropland, the Agriculture Ministry forecasts that the harvest should reach 6.5 million tonnes this year.
Despite this estimate, Mafioletti believes that export should not follow this growth. This is due to the fact that, for the time being, there is still a large volume of the wheat from the last harvest available for export and, with the improvement of the domestic market, producers and wholesalers should turn their attention to the domestic market.
The Ocepar technician also added that producers from Paraná will not have many other options this year, apart from production of wheat. This is due to the fact that, according to him, many farmers initially intended to plant maize, but with the drought that the state suffered during the months of February and March, this choice was frustrated, as the moment for sowing maize has passed. "Producers have no option but wheat," he added.
Well-known path
Although export perspectives for this year are not very great, Mafioletti stated that producers already know the foreign market rout and are prepared to sell internationally in case good offers arise, or in case the mills return to offering lower prices than those paid for the imported product.
Apart form that, he also stated that Brazil is now known as a wheat producer, although it is a great importer. "The producer does not object to selling internally or on the foreign market. The market will decide that. If there is good international offer and logistic conditions are good, he will sell," he stated.
Maize and inspectors
The Agriculture Ministry has also announced the maize export figures. From the beginning of the year to March 25, shipping totalled 1.942 tonnes of the product, against 374,800 tonnes in the same period in 2003.
Still yesterday, Agriculture minister Roberto Rodrigues announced the liberation of around US$ 1.4 million for the temporary hiring of 450 sanitary inspection agents. "The agents will act mainly at the cold storage houses that export beef. After all, we have to take care of the quality of our exported product as we do of the product turned to the domestic market," stated Rodrigues, through a ministry spokesperson.
He also stated that another US$ 1.2 million should be turned to inspection of growth and trade of transgenic products.
